Cloud computing allows users to access data and software stored online, eliminating the need for local storage.
Virtualization gives cloud-computing vendors economies of scale enabling them to offer on-demand software, computing, or infrastructure cheaper than on-premise alternatives. Apart from lower cost, there are many benefits to using cloud computing, including the ability to work from anywhere and the option to deploy services quickly.
While many companies have played significant roles in the development of cloud computing these ten companies that really got the ball rolling.
- By Rosalie Marshall, special to CNBC.com
(Date posted: 26 May 2014)
Company value: Estimated $4.1 billion
Analyzing the rapidly growing amounts of digital data produced daily provides companies with major opportunities. For 10 years open-source project Apache Hadoop has made such analysis possible, having invented a method for organizations to store and process 'big data'. Hadoop, with its revolutionary parallel processing technique, is currently used by the world's largest websites, including Yahoo, Facebook and Twitter.
However, until 2008, the complexity of Hadoop technology kept big data analytics out of reach for many organizations. That's where Cloudera comes in; Cloudera integrated Hadoop's most popular projects into a single enterprise-ready cloud package, along with additional management and support services.
Since its launch six years ago, Cloudera has grown to 600 employees and reached 350 enterprise customers. In addition to its commercial offering, Cloudera contributes a version of its product to the open source community that's used by thousands of organizations worldwide. In April, Intel paid $740 million for an 18 percent stake in Cloudera, valuing the company at $4.1 billion.
Company value: Unknown (Acquired in February for $16 billion)
Launched in 2009, WhatsApp helped establish the mobile cloud. The mobile messaging app can be used with any smartphone that has an internet connection and supports all of the major mobile platforms.
WhatsApp replaces text messaging and functions like BlackBerry Messenger and Apple iMessenger, but is platform agnostic. Through bypassing mobile carriers' SMS (short message service), WhatsApp allows users to swap messages for free internationally.
The niche Whatsapp occupies in the mobile and cloud market is why Facebook recently snapped it up for $16 billion, the social networking giant's largest-ever acquisition. WhatsApp has 450 million active users worldwide.
Company value: Unknown (Acquired in 2011 for $8.5 billion)
Skype has been a game changer in the social media space. Launched in 2003, the service is still going strong. So strong in fact that Microsoft bought the firm for $8.5 billion in 2011.
Both businesses and consumers have been drawn to Skype as the service allows users to connect from anywhere using any device with an internet connection. Registered users can call or chat to each other for free with or without video. Users can also make low cost calls to landlines and mobiles.
Skype may appear out of place on a list of cloud game changers because its reputation was built on peer-to-peer (P2P) networking. However, a few years ago, Skype began moving to a new cloud infrastructure that relied on its own company servers to power the service.
Even when Skype was a P2P service the external proposition offered to customers was a software-as-a-service. Skype has always been web-based, required little maintenance, and accessible from any device.
Company value: Estimated $1.6 billion.
Automattic shook both the web and publishing worlds when it launched WordPress.com in 2005, a commercial alternative to the open-source Wordpress.org project.
Wordpress.org was pivotal for the technology industry in giving businesses and consumers the ability to launch their own websites. However, the project still requires user responsibility for web hosting, site optimization, maintenance and backup. By contrast, Wordpress.com enables anyone to launch a website, even those with little technical knowledge. They just have to pay a monthly service fee to Automattic.
Automattic is not only a cloud game changer for giving all web users an online voice, it also encourages working with the open source community. After launching a website through Wordpress.org, the owner can add all the customization they need. The website can then be swapped to Wordpress.com for an easier maintenance model.
Matt Mullenwag is responsible for co-creating the Wordpress.org project and founding Automattic. The success of Mullenwag's endeavors is shown by the popularity of Wordpress which now powers 22 percent of the web. In May, Automattic raised $160 million from investors, including Insight Venture Partners, valuing the company at $1.16 billion.
Automattic's success has seen the emergence of competitors such as Wix and Squarespace.
Company value: Estimated $4 billion
Spotify's on-demand song library, launched in 2006, has been a major game changer in allowing people to consume their home entertainment through the cloud.
Spotify founders Daniel Ek and Martin Lorentzon aimed to fill a niche in the entertainment market after witnessing the popularity of Napster, a peer-to-peer service used to pirate music.
Napster's problem was that it encouraged users to partake in piracy and required users to go through the lengthy process of downloading every file they wished to copy.
Enter Spotify, a music streaming service with model that operates legally and rewards artists with royalties. Spotify now has 24 million users and operates in 56 countries. Over six million of these users pay for the music service, which has allowed Spotify to pay out over $1 billion in royalties to-date. In November last year, Technology Crossover Ventures led a $250m investment round into Spotify, valuing the company at $4 billion.
Shortly after Spotify's launch, Netflix began allowing users to stream films from the cloud. Netflix went on to impact the movie industry, just as Spotify had done in the music industry.
Company value: $40.18 billion
VMware enables businesses to set up public and private clouds.
The introduction of the VMware workstation in 1999 brought virtualization to market. Virtualization allows ITinfrastructure to be more productive, making the technology fundamental to the creation of cloud architecture.
Fifteen years later and VMware continues to lead the virtualization market with its vSphere hypervisor and its vCloud management software.
Last year, VMware entered the public cloud market, launching the vCloud Hybrid Service. This enables organizations with VMware-based data centers to seamlessly expand out to public cloud infrastructure using their same management and orchestration tools. The product is seen as a breakthrough in the cloud market for allowing customers to easily move between public and private clouds.
According to VMware, over 500,000 organizations worldwide currently use its technology.
Company value: $352.54 billion
A cloud native, Google is undoubtedly one of the market's most famous game changers. Larry Page and Sergey Brin made their names with the Google search engine but this was just the beginning of their acclaimed mission to organize the web's infinite amount of information.
First, Google launched its free email offering Gmail in 2004, with a storage capacity of 1GB and an interface that trumped both Hotmail and Yahoo Mail, the dominant webmail services at that time. Then Google revealed Docs in 2006, allowing users to store their documents in the cloud and access them from anywhere. This was the beginning of cloud storage, the precursor to Google Drive (launched in 2012) – a technology that has since been picked up by the likes of DropBox, Box and WeTransfer.
Docs soon became part of Google Apps in 2007, the company's first move to branch out of the consumer market into the enterprise market. Apps matched the applications offered by Microsoft's Office, and was the first web-based suite capable of replacing conventional PC software. Google was revolutionary in allowing businesses to run their offices in the cloud. Today, over 5 million businesses use Google Apps.
Google continues to innovate in the cloud, recently focusing on social products like Google Hangouts, Google+ and Google Chromebox.
Company value: $30.86 billion
Salesforce.com established the cloud as a viable platform for delivering business applications. The company pioneered the software-as-a-service (SaaS) model in the face of fierce criticism from traditional IT firms like Microsoft and Oracle, who doubted businesses would ever be able to trust the cloud with sensitive data. However, Salesforce was quick to prove its rivals wrong; it soon built a strong user base for its customer-relationship-management (CRM) products. As Salesforce celebrates its 15th anniversary, the firm has over 100,000 customers.
Over the years Salesforce has expanded its product portfolio to include analytics, marketing and social networking tools. The firm also expanded beyond SaaS into the platform-as-a-service market with the launch of Force.com in 2007, which allows developers to build their own applications on the Salesforce cloud.
Part of Salesforce's success has been down to its founder Marc Benioff, a brash and outspoken revolutionary in the tech industry. When launching Salesforce, Benioff pronounced the traditional software model dead.
Company value: $3.73 billion
Rackspace has been providing datacenter services ever since its 1998 launch. While offering customers these hosted clouds, Rackspace realized there was a growing need in the market for cloud interoperability and standards. Customers wanted to be able to move their cloud infrastructure between providers if they so desired, whether that be from Amazon Web Services to Rackspace, or from Rackspace to Firehost and so on. The bottom line was that customers did not want to be locked into one single proprietary cloud.
It is for this reason that Rackspace partnered with NASA to create OpenStack. The OpenStack project, launched in 2010, aims to standardize the way virtual clouds are run. So if a business is experiencing downtime when hosting a customer database on its own IBM servers, OpenStack management tools can be used to transfer this database to a Rackspace or HP cloud.
Part of the reason OpenStack has been so successful is because it is opens source. Rackspace says that 388 companies are now collectively working on the OpenStack code, including industry giants Red Hat, IBM and Intel, with all of the firms equally invested.
Company value: $134.48 billion
Founded in 1995 to sell books online, Amazon was an original dot-com success story. But it's Amazon's Web Services business that earns the company a top spot on the game changer list.
The success of Amazon.com made the firm realize its knack for running infrastructure to support scalable web applications. In 2002 Amazon Web Services was launched, offering organizations pay-as-you-go access to virtual servers and data storage. This infrastructure-as-a-service (IaaS) offering meant businesses could run their entire IT department in the Amazon cloud.
Since then, thousands of businesses have used the building blocks provided by Amazon Web Services, including S3 Storage service, EC2 compute cloud, and Simple DB online database, to assemble cloud applications quickly. Because the applications run on the Amazon cloud, they can scale to support changing workloads, with businesses just paying for the computing they use. This has brought an end to businesses having to buy extra servers in order to support a peak in user demand for a certain application, only to find the servers are no longer needed in a few months time.
Now the IaaS market is full of players, included Rackspace, HP, Verizon, Joyent, AT&T, and GoGrid.